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Where Taxpayers and Advisers Meet

stamp duty BTL- TRansfer of equity

frakky
Posts:2
Joined:Tue Jul 18, 2017 12:32 pm
stamp duty BTL- TRansfer of equity

Postby frakky » Tue Jul 18, 2017 12:42 pm

Hi

My husband is looking to transfer half of his second property to me and take out a new BTL mortgage . The property is worth 95K outstanding Mortgage is 90K. We are financing 20K to reduce the mortgage before hand. If this is done before taking out the new btl mortgage then I was thinking that the consideration for my half will only be 35K ( half of 70K mortgage) meaning it is under the 40K threshold for the 3% stamp duty tax? Is this correct?? Or will the 20 K paid off also be classed as consideration?

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: stamp duty BTL- TRansfer of equity

Postby maths » Tue Jul 18, 2017 4:37 pm

Are you currently on the legal title?

Are you going to be a joint borrower re the remortgage?

frakky
Posts:2
Joined:Tue Jul 18, 2017 12:32 pm

Re: stamp duty BTL- TRansfer of equity

Postby frakky » Sat Jul 22, 2017 11:31 am

No I am not currently on the title and the remortgage will be in joint names with A new lender .

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: stamp duty BTL- TRansfer of equity

Postby maths » Sat Jul 22, 2017 2:37 pm

If you both agreed that a joint borrowing of 20k was to be incurred but your half was to be treated as a loan to husband (and thus repayable; charge him interest at same rate as borrowing) and he then used the monies to repay 20k of his (not your) mortgage debt then at that stage you have provided no consideration in return for the acquisition of a beneficial interest in property.

He then seeks to remortgage and in doing so adds your name to the legal title and mortgage giving you a 50% beneficial interest which would be below the 40k de minimis re the 3% SDLT charge.

SDLT provisions contain anti-avoidance rules eg linked transactions.The question is whether the above would be so caught.


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